WATERLOO -- Black Hawk County government once again will turn to the bond market to help give urban homeowners a tax cut next year.

Members of the Board of Supervisors have wrapped up budget deliberations for the fiscal year beginning July 1, 2008, with a spending plan knocking 3 percent off the county's share of a tax bill for residential property in city limits.

"I'm really pleased with the tax askings that came in," said Supervisor Tom Little at the board's last budget work session.

The supervisors are expected to vote Tuesday to set a Feb. 28 public hearing date for the budget, which will generate substantially higher property tax bills for rural residents and farmers. Voters in the unincorporated area decided in a Jan. 29 referendum to give up some property tax relief by shifting half their local option sales tax proceeds to road construction.

The proposed budget calls for total property tax collection to grow by 6.2 percent, based largely on $1.25 million in new taxes levied in the rural areas to replace the option tax money used for road projects. The cumulative tax increase would have been just 1.69 percent, or $473,000, without the change in option tax use.

Board members started budget deliberations looking at a 6 percent tax increase, not county the option tax change. That was trimmed during several meetings where board members reviewed departmental budgets one by one, and reduced overall tax collection.

Big-ticket changes included eliminating 22 positions, primarily at the Country View care center.

"There were not bodies in those positions," said Finance Director James Bronner. "The were vacant positions and they just decided not to fill them."

The county also revised proposed health insurance costs to reflect a 6 percent increase rather than the initial 9 percent projection, and added $250,000 in additional interest revenue to be earned on the county's cash reserves, which have grown over the past year.

The budget includes 3 percent raises for most county workers, including both union and nonunion workers, although some union contracts remain to be settled. Department heads and elected officials will receive 2.5 percent wage hikes.

Meanwhile, the budget once again boosts the annual bond issue to pay for capital projects and equipment.

The county started borrowing money for such projects about five years ago, essentially removing capital requests from the operating budget, borrowing money instead and paying it off with interest in following budget years. The bond issue has grown from $800,000 three years ago to a projected $2.2 million for the coming budget. That doesn't include another $10.6 million in bonds projected to be issues related to the local option tax road repairs.

The lion's share of the bonds are for large capital improvements, such as a $340,000 to repair exterior jail walls and $445,000 to replace the courthouse boiler, but also includes equipment, such as computers.

Board members seemed to acknowledge the growth in the debt, but said the county is expected to see those expenses decline in future years.

"I just can't emphasize enough how we've got to plan for this stuff instead of taking it in big chunks," said Supervisor Tom Little.

Overall debt level is not increasing substantially because older debt is being paid off, notably the voter-approved bonds issues to finance the Black Hawk County Jail. But as that debt is retired, new bonds are being issued to take their place.

The proposed budget would lower the regular county property tax rate from $7.21 to $6.96 per $1,000 of taxable property value, while the rate paid in unincorporated areas -- those residents who do not pay a city tax rate -- would grow from $7.66 to $9.74 per $1,000.

Because of a state equalization order, which boosted residential property values by 7 percent and commercial property values by 9 percent, and a subsequent change in "rollback" figures lowering the percent of a property value that is taxed, the proposed budget will affect residential, commercial, agricultural and industrial properties by a different percentage.

A $100,000 house in the city limits now pays $338 as the county's share of their tax bill. That would drop $10, or 3 percent, under the proposed budget. A $100,000 commercial property would see its tax bill increase $14, or 2 percent, to $755. The county share of an industrial property tax bill would fall 6 percent.

In the rural areas, taxes on a $100,000 house would go from $349 to $459, an increase of $110 or 31 percent, while taxes on agricultural property would jump by 32 percent. That large increase is the result of the voter-approved option tax referendum.

Contact Tim Jamison at (319) 291-1577 or tim.jamison@wcfcourier.com.